f33l 


Duke   University   Libraries 

Special  report 
Conf  Pam  #391 


SPECIAL  REPORT 

OF  THE  SECRETARY  OF  THE  TRP^ASURY  ON  THE 
SUBJECT  OF  THE  I^INANCES. 


Treasury  Department,  C.  S    A., 

Richmond,  January  9th.  18G5. 

Hon.  T.  S.  BococK,  Speaker  of  the  House  of  Representatives  : 

Sir  :— In  the  report  made  to  Con.iijrcs^i  on  the  7th  of  November, 
the  nrreor  of  ijidrblednoss  wns  estimated  to  i^avr  l)ecn  $114.000  000, 
on  the  1st  of  July,  18G1,  at  the  commencement  of  the  lialf  year. 
The  close  of  that  ))eriod  on  the  MLst  of  Decenihor,  exhibited,  by  the 
sum  of  the  requisitions  rcniainino;  unsatisfied,  that  the  estimate  re- 
ferred to  was  too  low. 

The  appropriations  made  by  Congress  for  the  six  months,  from 
1st  July  to  31st  December,  18G4,  and  the  paymentR  made  in  pur- 
suance thereof,  are  exhibited  in  the  following  table  : 


Anminta  appro-  1  ^"'7"' IL''^"*'^'-''- balance  pajnl.lein'      ^  .       ., 


War  Departnifiii,                        :!:.S,l!7,7(t()  00|  6'2,738,fiC7  0(t 

Navy            '•                                  lu,'i2(»,:;il2  7.")'  370,000  00 

Treasury     "       j_      lir>,31f)^lir)  .Mj 5,T1 8,796  82 


'29i,fl3i),ll:!  00 
9,S44  302  75 

:i2ri,129,734  94 


827,S(y^90f)  18 

1-'!.597,ri45  S2 

25,7Ul,9:i6  13 

"801^200  :!S7  18 


Total  appropriations  $525,129,784  94 

Amount  paid  367,250,387  13 


Excess  $42,120,652  19 

Amount  appropriated  for  Trans- Mississippi  De- 
partment, $68,833,363  32 
Remitted  Treasury  notes  from  June 

3d  to  Nov.  23d,  1864,  $20,000,000 

"         G  per  cent,  non-taxable  bonds 

from  July  21  to  Nov.  9,  '64,     6,000,000 
'*         4  per  cent,  loan  from  July 

21  to  Nov.  9,  1864,  9,000,000 

»        certificates  of  indebtedness.     12,000,000        47,000,000  00 


Balance  to  be  remitted,  $21,833,363  32 

The  requisitions  remaining  unsatisfied   at   the  close  of  the   year 
amount  to  $183,000,000 


Deduct  the  sum  included  in  the  eatimatcs  of  November 
7,  as  above  stated,  1 14,000,000 


Excess  of  indebtedness  over  the  previous  estimate,        $09,000,000 
The  several  liurcanx  of  the  War  Department  report 
an  additional  indebtedness,  not  embraced  in  the  re- 
quisitions, of  184,682,292 
Gen.  E.  Kirby  Smith  reports  the  iadebtcdness  in  the 

Traus-Mis&issippi  Department  at  60,000,000 


$313,682,292 


To  this  a^nount  must  be  added  the  sum  of  $^^3,000,000,  for  an 
ascertained  deficiency  in  tlie  nett  value  of  the  tax  in  kind.  It  was 
estimated  in  the  report  of  November  7th,  at  $145,000,000,  and 
credit  was  given  for  this  amount  in  estimating  the  resources  of  the 
approaching'  year.  It  apj)ears  that  tlie  value  of  $62,000,000,  derived 
licm  this  source  by  the  Commissary  Dcjiartment,  constitutes  the 
whfde  ueto  products  of  tlie  tax;  the  value  of  the  poriion  assigned 
to  the  (^uai  teriiiaster'a  Department,  irf  absorbed  by  the  expenses 
JncidniL  to  ihe  collection  and  transportation  of  the  su])})lios,  which 
are  defrayed  by  that  department 

The  8iim  (  f  these  new  demands  and  for  which  additional  provi- 
Hion  niusL  now  be  made,  is  $396,68-2,292.  The  character  of  the 
(lel>t  is  such  that  the  payment  cannot  be  neglected,  or  even  post- 
potiod,  without  danger  of  seriously  embarrassing  the  operations  of 
ihe  \\'ar  Dejtartuicnt.  it  is  for  supplies  obtained  in  all  parts  of 
tiic  country,  and  delivered  u])on  the  credit  and  good  faih  of  the 
government  The  citizens  by  whom  they  were  furnished,  however 
niimci'ous,  arc  yet  but  apart  of  our  jaopulation.  They  must  be  in- 
capable, and  wcuhl  naturally  be  unwilling,  long  to  sustain  so  un- 
('i]nal  a  l)urthen.  The  ellcct  is  that  of  a  tax  unjustly  thrown  up- 
on a  few,  instcail  of  being  equally  shared  l)y  all;  and  a  sense  of 
ill  jury  will  combine  with  the  pecuniary  burth^^n,  to  discourage  the 
<ielivery  of  fiatwre  supplies.  The  i»romj)t.c8t  measures  of  relief, 
therefore,  are  demanded  l)y  every  consideration  of  justice  and 
policy  ;  and  J  earnestly  recommend  tiic  matter  to  the  immediate 
consideration  of  Congress. 

J  have  looked  in  vain  for  some  source,  upon  which  we  might  draw 
for  tljcse  extraordinary  demands,  in  lieu  of  taxation ;  no  other 
alternative  presents  iiself. 

Dut  however  burdensome  so  large  an  addition  to  the  taxe»  may 
be  fouad,  it  will  yet  bear  with  less  severity  upon  the  whole  body 
of  tax  j)ayers,  than  upon  the  smaller  number,  by  whom  it  is  now 
sustained.  Regarded  in  this  view,  it  resolves  itself  into  a  question 
of  distributing  and  equalizing  a  tax  already  paid  by  the  people. 
J  jiropose,  therefore,  that  the  required  sura  be  chiefly  derived  from 
taxation;  that  the  present  scheme  of  taxation  be  adhered  to,  with  the 
amendments  recommended    in  my   report   of  November  7th ;  and 


that  100  per  cent,  be  added  to  the  e^  isting  rates ;  and  in  the  an- 
plication  thereof  to  the  tax  in  kind,  that  it  be  assessed  upon  the 
value  of  the  same,  and  be  paid  in  treasui-j  notes. 

The  additional  revenue  that  will  be  raised  by  this  means  mav 
be  estimated  at  $360,000,000,  leaving  a  deticiency  to  be  obtained 
from  other  sources,  of  $36,000,000.  This  amount  may  be  raised 
from  the  ealo  of  cotton. 

The   reluctance    with  which  I  recommend  so  great    a  weio-ht  of 
taxation,  is  overcome  only  by  the  momentous  character  of  the  oc- 
casion that  demands  it.     I   feel  no   little  encouragement,  however 
trom  the   reflection,  that  great  as   these  demands  are,  they  are  at 

l^»AAnnnni^'^.'''°'^^'°'^^^'^    ''-^    ^^^    ^^^"^    «^  ^"^    pPOduCtionS.      If 

1720,000.000  of  taxes  are  to  be  collected  from  the  people  it  is  be- 
cause $720,000,000  are  to  be  paid  to  them  for  supplies.  '  The  ex- 
penditures denote  the  sum  of  the  productions  applied  to  the  public 
defence;  taxation  is  the  machinery  liy  which  the  general  contribu- 
tion is  distributed  and  equalized. 

Nor  should  the  depreciation  of  the  currency  be  lost  sight  of  in 
esitmatmg  the  weight  of  the  burthen.  The  sum  stated  is  barclv 
eciual  to  $20,000,000  in  a  sound  currency.  If  we  had  the  option  of 
another  choice,  it  seems  doubtful  if  we  should  forego  the  advantage 
of  a  mode  of  payment  so  cheap.  Nothing  is  so  low  in  value,  or  so 
easy  of  acquisition,  as  the  medium  in  which  the  tax  is  demanded 
and  not  to  defray  the  expenditures  in  the  present  currency,  I)ut 
tund  them  for  payment  in  specie  at  a  future  day,  if  that  were  prac- 
ticable, would  be  to  disregard  the  obvious  su<rgestions  of  nru- 
deace.  "  ' 

I  venture,  too,  with  great  respect,  to  suggest,  that  the  coura'^e 
and  resolution  by  which  a  present  sacrifice  is  made,  to  ward  of^'a 
distant,  but  formidable  danger,  is  an  exercise  of  wisdom  as  well  as 
of  virtue.  The  occasion  seems  to  demand  such  a  sacrifice  at  our 
hands ;  and  having  an  abiding  confidence  in  the  righteousness  of  our 
cause,  and  in  the  intelligence  and  virtue  of  our  people,  I  fearlessly 
recommend  the  measures  demanded  for  the  defence  of  our  honor 
and  the  preservation  of  our  rights.  ' 

While  these  measures  hold  out  the  promise  of  an  adequate  amount 
of  revenue  for  the  eventual  extinguishment  of  the  arrcar  of  debt 
and  for  the  payment  of  the  current  expenditures,  they  afford  no  re- 
lief for  our  present  necessities.     Their  early    adoption,  however 
will  inspire  confidence  in  the  resources  of  the  trovernment,  and  en- 
courage temporary  loans  in  advance  of  the  revenue. 

To  promote  the  early  liquidation  of  the  arrcar  of  debt,  I  recom- 
mend that  the  certificates  of  indeljtcdness,  authorized  by  the  Act  of 
17 th  February.  1864,  be  made  receivable  in  payment  of  the  100 
per  cent,  additional  tax  recommended  in  this  report,  and  that  they 
be  taken  in  payment  without  interest,  but  at  tlie  rates  of  $10.",  for 
$100. 

1  would  respectfully  urge,  too,   the  passage  of  the    l)ill  for  the 


angDientation  of  the  export  ami   import  diitie?,  to  encourage  and 
promote  the  sale  of  the  live  linndi-ed  million  loan. 

A"  an  additional  measure  for  tlie  convenience  of  the  Treasury 
and  <  f  tlie  |»ul>lic,  I  recommend  that  antliori'yhe  fri^en  to  this  l^e- 
partinent  to  e>^taldish  an  ollicc  of  Deposit.  i!i  connection  with  t^e 
Treiieiny.  Throntrh  its  intrnmcntality.  the  fame  sum  maj  be  made 
repeatedly  to  perform  the  fuiiction  of  payment,  and  both  by  the 
performance  of  this  manifold  duty,  and  by  its  withdrawal  from  the 
channels  of  speculation,  to  contribute  in  arresting  the  progress  of 
depreciation. 

Thi.«  office  should  be  kept  separate  from  the  Trea?ury  proper:  it 
should  receive  on  deposit  the  current  fur.ds  of  those  having  rela- 
tions and  transactions  with  the  government,  and  thot^e  of  the  public 
generally,  and  pay  the  same  out  upon  the  che<"ks  of  depositor?. 
And  it  should  be  authorized  to  deposit  in  the  Treasury,  returna- 
ble at  call,  not  more  than  two-thirds  of  the  deposits. 

G-  A.  THEN  no  LM, 

Secretary  of  the  Treasury. 


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